Homebuilder PulteGroup (PHM) broke out on the upside and is likely to move still higher in the months ahead. Let's look at the charts and decide on a level to buy and a level to risk.
We lead off the analysis with this Point and Figure chart of PHM, below. By plotting only changes in price of $1.00 or more the Point and Figure chart can clearly show breakouts and breakdowns. In this chart the breakout at $24 overcomes the highs of 2015 and 2013. The bull is in charge.
In this one-year daily bar chart of PHM, below, we can see a small bottom pattern in November-January that helped to propel prices upward in February and March. The On-Balance-Volume (OBV) line has been rising all year and the pace of the advance looks like it accelerated in the new year. Prices are above the rising 50-day and 200-day moving averages with a bullish golden cross in February. The Moving Average Convergence Divergence (MACD) oscillator has been above the zero line (bullish) since mid-January.
In this weekly chart of PHM, below, we can see that prices have broken out over the highs of 2016 and 2015. The 40-week moving average line is bullish (rising) and the weekly OBV line has turned upward. The weekly MACD oscillator is very bullish.
Bottom line: I would look to buy PHM on a shallow dip to $23 if possible and then have a sell stop for now just below $21.50. Look for PHM to rally to the low $30s.